UK Grants - Grant for Business Investment

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UK Grants - Grant for Business Investment

  1. 1. Grant for Business Investment (GBI) Formerly known as Selective Finance for Investment in England (SFIE)
  2. 2. What is GBI? <ul><li>GBI is a BIS ‘Solutions for Business’ product which is administered by the 9 R egional D evelopment A gencies. </li></ul><ul><li>GBI primarily provides financial help for the manufacturing base for capital investment projects which will increase productivity + skills + employment in the regions. All 3 are a scheme priority and requirement. </li></ul><ul><li>GBI is discretionary and generally this will be the minimum necessary for the project to go ahead based on proven financial need. Grant rates vary across the region. The average intervention rate is around 10-20%. </li></ul>
  3. 3. What is GBI? The 9 Regional Development Agencies
  4. 4. The old SFIE scheme
  5. 5. The new GBI scheme “ Ultimately the same product just different wrapper”
  6. 6. What is it for? <ul><li>GBI can be used to………… </li></ul><ul><li>Launch a new business - premises and equipment </li></ul><ul><li>Modernise , expand or reorganise your existing business </li></ul><ul><li>Upgrade your business by introducing innovative new technology or processes </li></ul><ul><li>Take a new product, service or process from the development stage to production </li></ul>
  7. 7. GBI Priority Sectors <ul><li>Food and Drink </li></ul><ul><li>Biomedical </li></ul><ul><li>Advanced Manufacturing & Materials </li></ul><ul><li>Creative and Digital Industries </li></ul><ul><li>Energy Environment technologies </li></ul><ul><li>A more complete UK priority sector matrix is on the next slide….. </li></ul>Who is it for………. The following sectors are considered priority sectors by most R egional D evelopment A gencies.
  8. 8. GBI Priority Sectors X             n/a Marine X   X X       n/a Tourism & Leisure       X       n/a Screen, Image & Sound       X       n/a Rail       X       n/a Interiors & Lifestyle ( High value added consumer items)     X X       n/a Building Technologies         X     n/a Transport Equipment     X   X     n/a Micro and Nanotechnology         X     n/a Global Navigational Satelite Systems     X   X X   n/a Construction           X   n/a Logistics           X   n/a Financial Services         X X   n/a Healthcare X X X X X X X n/a Food and drink X X X X X X X n/a Energy and environmental technologies   X X X     X n/a Business and professional services X X X X X X X n/a Creative and digital industries X X X X     X n/a Biomedical (biotechnology, medical and pharmaceuticals) X X X X   X X n/a Advanced manufacturing (aerospace, automotive, chemicals, advanced flexible materials) SWDA SEEDA EEDA AWM EMDA YF NWDA ONE REGIONAL PRIORITY SECTORS
  9. 9. A project must… <ul><li>Have the potential to increase the region's economic output </li></ul><ul><li>Show a proven need for financial support - without a grant it would not happen, or only happen on a more limited scale. </li></ul><ul><li>Involve capital investment on fixed assets such as property or machinery of more than £50K. </li></ul><ul><li>Create new jobs or safeguards jobs which would otherwise be at risk </li></ul><ul><li>Show that the majority of jobs created or safeguarded are at NVQ level 2 or equivalent </li></ul><ul><li>Demonstrate that the business/project will become self-sustaining within a reasonable timeframe. Usually 2-3yrs. </li></ul><ul><li>Have most of the finance for the project coming from private sources, such as banks or company funds. </li></ul>
  10. 10. What is it really for? <ul><li>So you have read the scheme documents. However what is the scheme really about…? </li></ul><ul><li>1 What is the scheme really about? </li></ul><ul><li>2 Where is GBI available and to who? </li></ul><ul><li>3 How does it work in practice? </li></ul><ul><li>4 How do companies get one ? </li></ul><ul><li>5 What type of companies actually gets them and how much? </li></ul>
  11. 11. 1 What is the scheme really about? <ul><li>The scheme has been put in place to provide finance of ‘last resort’ for companies who can prove they have a good ‘growth’ project planned for the business that will benefit the regional economy but at the same time have insufficient internal and private funds on offer to fully fund it. </li></ul><ul><li>And the project involves new investment in ‘capital’ to get them there. </li></ul><ul><li>This new investment must increase productivity and employment but not disproportionally. The dreaded GVA trap! </li></ul><ul><li>I.E: Each new unit of Labour employed on a grant project must increase productivity per person in the company. The government will fund you if you work harder and smarter! </li></ul>
  12. 12. 1 What is the scheme really about? <ul><li>To support companies who want to get from A to B by investing in [X] but who either cannot afford all of [X] or investing in [X] has high risk attached. </li></ul>
  13. 13. 1 What is the scheme really about? <ul><li>The scheme is there in order to invest in projects which would not otherwise go ahead but which if funded will increase GVA for that company and thus GDP. The more companies like this they invest in – The more the regions GDP increases! 9 Regions = UK Economy. </li></ul><ul><li>The scheme is an economic tool to fill a gap where there is free market failure. The government can see the rewards in investing through grants if they can measure this benefit to them. </li></ul><ul><li>How do they measure this? </li></ul><ul><li>Gross Value Added </li></ul><ul><li>Increasing Employment </li></ul><ul><li>Increasing Job Skills </li></ul>
  14. 14. 1 What is the scheme really about? <ul><li>Gross Value Added (GVA) </li></ul><ul><li>(GBI Definition) </li></ul><ul><li>GP+DL-IMS </li></ul><ul><li>FTE Staff </li></ul><ul><li>GP = Gross Profit </li></ul><ul><li>DL = Direct Labour </li></ul><ul><li>IMS = Indirect Materials & Services </li></ul>
  15. 15. 2 Where is GBI available
  16. 16. How Much is Available? <ul><li>The actual amount offered however is dependant on: </li></ul><ul><li>‘ The project funding deficit proven by the applicant’ </li></ul>N/A 10% 20% Tier 3 grant regions 15% 25% 35% Tier 2 grant regions Staff > 250 50< Staff > 250 Staff < 50 Size Large Businesses Medium Enterprises Small Enterprises GBI GRANT RATES
  17. 17. How Much is Available? <ul><li>… ..An Example </li></ul><ul><li>A small engineering company in a Tier 2 region making a £800K (£500K Building + £300K equipment) investment theoretically according to the table could warrant a grant of up to 35% = £280K </li></ul><ul><li>However on grants above £100K EMDA wish to see the grant linked heavily to new employment. They will attach a ‘Unit’ of grant value per job. I.e. They may wish to invest in this company but on the basis of both need and that each job they create they will get £6K in grant investment for each job created. </li></ul><ul><li>This company is looking to create 10 new jobs over the next 2 years. </li></ul><ul><li>The likely available grant here therefore would not be £280K but more like (10 x £6K) = £60K . </li></ul><ul><li>How much should they apply for? £280K or £60K ? </li></ul>
  18. 18. How does it work in practice? <ul><li>So how do you work out how much to apply for? </li></ul><ul><li>Project Spend </li></ul><ul><li>75% Finance Cash </li></ul><ul><li>New Building £500K £375K £125K </li></ul><ul><li>Machinery £300K £225K £75K </li></ul><ul><li>Totals £800K £600K £200K </li></ul><ul><li>This company has an overdraft facility of £100K and is unused but it uses all of its available money for working capital. It can therefore afford a £100K deposit but not £200K. The company should look to apply for £100K . </li></ul>
  19. 19. How does it work in practice?
  20. 20. How does it work in practice? Grant Finance
  21. 21. How do you get one? <ul><li>Theory Vs Practice </li></ul><ul><li>Well you have seen the theory but there are many other areas to satisfy too. However if you crack the ‘quality’ and ‘need’ aspects then the other areas should be easily manageable. </li></ul><ul><li>However the theory DOES work because WE have being doing this for 19years across the UK. The KEY is understanding what they want and are looking for and ensuring you clear all the hurdles at the first attempt. </li></ul><ul><li>How to apply…………… </li></ul><ul><li>Pre-application - up to 3 Docs & 10 days to review </li></ul><ul><li>Full application - Full Application, Business Plan and full financial forecasting & 6 weeks to review </li></ul>
  22. 22. Regional Offers <ul><li>How much is offered each year? </li></ul><ul><li>Around £60m each year is offered on a national basis </li></ul><ul><li>Jaguar Landrover in 2009 award the largest GBI to date of £27m </li></ul><ul><li>Grants of above £2m are awarded and reviewed by BIS direct. </li></ul>
  23. 23. What type of companies get them? <ul><li>Bridge End Joinery Ltd Kendal £45,000 </li></ul><ul><li>Techmarkets (Manchester) Ltd Manchester £75,000 </li></ul><ul><li>Unicut Precision WGC £99,000 </li></ul><ul><li>Unilathe Precision Stafford £67,000 </li></ul><ul><li>Mastercut Cutting Systems Ltd Chesterfield £75,000 </li></ul><ul><li>Tunneltech North Ltd Newington £75,000 </li></ul><ul><li>J P Forrest & Sons Worksop £75,000 </li></ul><ul><li>Northshore Yachts Chichester £99,000 </li></ul><ul><li>Fortress Double Glazing Liverpool £140,000 </li></ul><ul><li>John Hogg technical Solutions Manchester £200,000 </li></ul><ul><li>EDF Energy Hove £1.45m </li></ul><ul><li>__________________________________________________________ </li></ul>
  24. 24. Testimonials <ul><li>Testimonial 1 </li></ul><ul><li>“ We have used the services of UK Grants since 1998 and in that time they have managed to secure for us £300K in grant aid to support the continual growth of our business. Because of the links we have in our industry we have also recommended UK Grants to several other companies who have also successfully used their services&quot;. </li></ul><ul><li>Martyn J Dewhurst, Managing Director </li></ul><ul><li>Tunnel Tech Limited </li></ul><ul><li>Testimonial 2 </li></ul><ul><li>&quot;EDF Energy had need to seek grant aid for a major multi million pound project in the Brighton area and were recommended to consider UK Grants for this work. They were selected after competitive tender and our experience of their company has been excellent. They are proactive and assisted our company in understanding the complexities of the grant systems, the need for us to provide detailed project and company financial information in the form required by the agencies concerned and then to help us find our way successfully through the political and practical issues. We received as a direct consequence of their professional assistance a grant offer well in excess of 1 million pounds. We would recommend them to other companies requiring similar assistance&quot;. </li></ul><ul><li>Andy Trotter </li></ul><ul><li>Head of Property </li></ul><ul><li>EDF Energy Plc </li></ul>

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